Times Of Swaziland: EEC APPLIES FOR TARIFF HIKE

EEC APPLIES FOR TARIFF HIKE
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Nhlanganiso Mkhonta on 05/11/2024 09:08:00


MBABANE – The Eswatini Electricity Company (EEC) wants an electricity tariff
review for the financial years 2025/26 and 2026/27.
The power utility has filed for the electricity tariff review with the Eswatini
Energy Regulatory Authority (ESERA). It is yet to be established how much in
percentage has EEC applied for and this will be revealed today as the regulator
has called a press briefing to make an official announcement.  EEC is required
to timeously submit a review application to ESERA by November 1. This is if
there is an intention to apply for a tariff review by the power utility. The
electricity tariff application typically includes a completed and signed form,
any required documents and proof of payment for the application fee.
Hearings
ESERA then holds public hearings to gather input from the public and other
interested parties. ESERA then considers many factors, including the need for
utilities to cover their costs while also keeping prices affordable for
consumers. It may also consider the economic situation and whether there are
alternative sources of electricity. The regulator then approves a tariff
increase or decrease. For instance, in 2020, EEC requested a 7.16 per cent
tariff increase for two years. ESERA approved a lower increase, allowing EEC a
revenue of E2.25 billion in 2021/22 and E2.60 billion in 2022/23. In 2023, ESERA
approved a 10.14 per cent increase for the 2023/24 financial year and an 8.02
per increase for the 2024/25 financial year.  In its recent application, EEC
mentioned that currently, electricity prices do not cover the full costs of
supplying power across the various tariff categories. Therefore, their
application at that time continued the migration to cost-reflective tariffs
across the various tariff categories.
The local utility’s application for tariff review follows that of South
Africa’s state-owned electricity company, Eskom, which applied to the National
Energy Regulator of South Africa to approve a 36.1 per cent electricity price
hike from April 2025, an 11.8 per cent price increase in 2026 and a 9.1 per cent
increase in 2027.
It is worth noting that EEC imports most of electricity from ESKOM.
Approved
EEC’s application comes just when the House of Assembly has approved a 12 per
cent water tariff hike, which will be staggered in the next three years. The
water tariff hike that will be effected at four per cent every year was approved
through the adoption of a report by the Ministry of Natural Resources and Energy
House of Assembly Portfolio Committee, despite opposition by some Members of
Parliament (MPs).  The MPs who supported the hike were convinced by the idea
that the hike will fund Eswatini Water Services Corporation’s (EWSC)
initiative to expand to rural areas.
The Chairperson of the Natural Resources and Energy Portfolio Committee in the
House of Assembly, Madala Mhlanga, said the tariff should have been implemented
in April this year, as currently EWSC is operating at a loss. He said the annual
four per cent tariff will be implemented beginning next year, 2026 and in 2027,
amounting to 12 per cent in total. Currently, EWSC is making a loss of E0.2
million. He added that the annual four per cent is the least that EWCS could
get, after serious consideration by experts.